… Not all facts are equally weighted in their importance for a decision, and this is where experience helps. An experienced leader can quickly eliminate factors and data points that will not help in determining the best option and focus on the data points that are instructive.

Many years ago, when I was interviewing for a high-level internal promotion, I was asked by the interviewer a common question that comes up in about 99 % of interviews: “Why should I hire you for this job?” In preparation for the interview, I had determined that it would be important to stress decision making as a crucial skill to demonstrate. To answer the question, I used an illustration asking the interviewer to picture a bag containing a few dozen tiles, each representing a potential unique fact or assumption that may or may not be meaningful in making a crucial decision. I then asked him to picture the bag being emptied on the table, randomly spreading the tiles. Since the tiles were randomly spread, there was no hierarchy of importance inherent in their placement. I explained that only decision-making experience, rational thought processes and sound judgment could help to quickly determine the factors that are important to inform good decisions and those that are not. I then walked through an example (which I don’t now remember) of an actual situation and how I approached making that decision.

If it is true that the ability to make sound, timely decisions is one of the most important skills of high-level executives, what separates good decision making from faulty decision making?

The book “Superforecasting: The Art and Science of Prediction” has as its centerpiece a massive, multi-year tournament called The Good Judgment Project (GJP) whose results formed the authors’ conclusions about what separates the best forecasters (i.e., decision makers) from the rest of the crowd. The GJP included from 2,800 to 3,200 participant volunteers over the twenty-year project lifetime who were tasked with predicting the outcomes of various global events. One of the most striking findings of the project was that, on average, people who were considered experts were no better at predicting event outcomes than randomly determined guesses. The image the authors used to describe this finding was that the experts did no better than chimpanzees throwing darts.1

Most people would assume that high level executives fall into the expert category for their business or industry. If the Superforecaster statistics bear out in this situation, does that mean that executives should just make decisions by throwing darts? Not by a long shot. Since Superforecasting highlights a few rare individuals whose ability to forecast future events far exceeded the average expert, it must be true that there are learnable tactics for better decision making.

One finding noted by the authors was that the superforecasters were good at determining which factors were likely to produce predictive value with a reasonable level of analysis and which factors would require significant work and provide little insight. This could be described as using good triage methods.2 As I tried to explain in my job interview illustration, not all facts are equally weighted in their importance for a decision, and this is where experience helps. An experienced leader can quickly eliminate factors and data points that will not help in determining the best option and focus on the data points that are instructive.

This ability to simplify – to separate the wheat from the chaff – was a strength of Steve Jobs in his leadership of Apple. In 1985, Jobs had famously been fired by the board of the company he founded, mostly for attempting to remove the existing board and for erratic behavior. In 1997, due to dismal performance by the company the Apple board reluctantly pursued bringing back Jobs as an interim CEO to turn things around. Jobs agreed and soon discovered he had walked into a company in shambles and overflowing with a confusing array of mismatched and poor-quality products put out by a disjointed team of engineers. Jobs quickly implemented one of his favorite management philosophies – Focus. In one of the many product line review meetings that Jobs held after his return, he suddenly had had enough of the team confusion and jumped up and shouted “Stop! This is crazy.” He went to the whiteboard, grabbed a marker, and made a four-square chart. Across the top of the two columns, he wrote “Consumer” and “Pro.” He labeled the two rows “Desktop” and “Portable.” He then challenged his engineers to completely scrap all current projects and instead make four great products, one for each quadrant.3 The rest, as they say, is history. From that point on Apple has been famous for producing high performing products that are cohesive in design, functionality, and quality.

Good decision making is also dependent on the ability to analyze and adjust. This can be difficult to achieve if feedback is slow and there is a considerable time lag in having data to review. It can also be difficult to determine on the fly when an assumption is wrong or fails. However, in the GJP contest the people who both sought and listened to feedback coupled with a willingness to be flexible, had a greater ability to forecast accurately.4 Succumbing to overconfidence is a blind spot for many leaders who overestimate their own “expert” status to the point that it hurts their ability to adjust based on current information.

To prove this point, the Superforecasters authors cite the lessons learned by military commanders around flexibility of decision-making. A Prussian general named Helmuth von Moltke whose victories in the mid-nineteenth century led to the unification of Germany was a major influence on German military thought thereafter. Moltke’s philosophy can be paraphrased as “no plan survives contact with the enemy.” Moltke’s writings became a guidebook for the German military beginning in the late nineteenth century and lasting until World War II. Even though Germany was ruled during the World War II period by the brutal dictator, Adolf Hitler, at the outset of the war the effectiveness of the German military was unsurpassed. This was because most of Moltke’s principles had already been ingrained in their military culture. Among his enduring ideas adopted by the German war academies was that disagreement was not only permitted but expected. In war time, junior officers were expected to give their opinions freely, especially following a failed initiative. The manual stated, “In the changing situations of combat, inflexibly clinging to a course of action can lead to failure.” In the later years of World War II when Adolf Hitler overruled his field generals and even removed and sometimes executed them, the philosophy of analyzing and adjusting fell apart and Germany’s defeat became certain.

Unlike Germany’s philosophy leading up to World War II, the American military’s culture at that time did not value individual thinking. Shortly after World War I, Dwight Eisenhower (a junior officer at the time) authored an article for the U.S. Army’s Infantry Journal in which he criticized the then-current direction of tank warfare strategy in favor of “speedy, reliable and efficient engines of destruction.” Later in life Eisenhower reflected on this early episode in his military career in which he was told plainly by his superiors that he was not to publish any unorthodox thinking, or he would be court-martialed. Fortunately, Eisenhower did not let that threat deter him as he rose through the ranks to become the Supreme Allied Commander. Eisenhower valued dissent and appreciated those who spoke up. One of his most effective generals, General George Patton also believed that his staff officers should take individual initiative. Patton said, “Never tell people how to do things. Tell them what to do, and they will surprise you with their ingenuity.”5

Good decision makers also learn from both failure and success. When I was working in Nashville, my hospital was trying to gain the state’s approval for a Certificate of Need (CON) to establish an inpatient rehab unit in the hospital. By law, Tennessee had a review board with about a dozen members that either approved or rejected healthcare providers’ proposals to spend capital above certain cost thresholds, or to increase capacity in certain defined services, or to establish new services. I and my team went before the board with a proposal that we thought was airtight in its logic to establish this new service for the hospital. We were resoundingly rejected. Our first task was to own the defeat and figure out why we failed. The result of that intense analysis was a new three-point plan designed to address all the board’s concerns in ways that were difficult to dispute. On our next attempt, we won approval and eventually established a successful inpatient rehab unit that was even expanded by 50 % within a year’s time. Analysis of failure led to success.

Similarly, it is critical to evaluate our successes because, frankly, sometimes pure luck comes into play.

The U.S. Navy’s precision flying team, the Blue Angels, is a fitting example of executing this philosophy. The Blue Angels team has a routine intense debrief process that reviews all aspects of their practices and performances, highlighting what went well and what did not meet their standards. In this review, even minor errors are surfaced because they could easily lead to catastrophic failure. This process is in place to continue to improve so that their end of season air shows are more difficult and precise than where they started the season. They are also intent on exposing when luck played any role in success so that those instances are treated as unrepeatable and unacceptable.

Returning to my job interview I referred to at the beginning of this article – I did not get that job. However, I was blessed to receive a call from the interviewing executive who let me know his decision and gave me feedback as to why he made it. That feedback proved to be invaluable to me in that it inspired a change in focus and led to even better career choices in my future. Analyzing that failure with information provided to me by the hiring executive aided my subsequent decision making. That was a rare instance in my career in which someone had given me such respect in a situation of failure. It was a lesson that I took to heart and tried to emulate in my own leadership practices. I will discuss that further in an upcoming post.

 

Notes:

1 Philip E. Tetlock, Dan Gardner, Superforecasting: The Art and Science of Prediction, (New York, Broadway Books), 4.

2 Ibid., 277.

3 Walter Isaacson, Steve Jobs, (New York, Simon & Schuster), 337.

4 Tetlock and Gardner, Superforecasting, 279.

5 Ibid., 213-221.